KUALA LUMPUR: Small and Medium Enterprises Association (Samenta) has called for the government to consider increasing the number of high paying jobs instead of raising the minimum wage.
Its national president Datuk William Ng said the minimum wage is a highly inefficient and ineffective way to improve wages.
Ng said by raising the minimum wage, it distorts the job market, forces businesses to cut jobs or reduce job expansions, and penalises more productive workers who may have lesser opportunities for increment and promotion.
"All these without necessarily increasing the spending power of the lowest wage earners that the system is designed to support.
"Instead of raising the minimum wage, the government should consider increasing the number of high paying jobs and training and reskilling Malaysians for them," he told Business Times.
He cited Penang and Kulim, Kedah as cities that are currently faced with a shortage of 50,000 engineers and technicians.
The industry is prepared to pay between RM 3,500 to RM 6,000 for them, but our universities are not producing enough to meet the demand, said Ng.
"If the government can replicate the success of the semiconductor industry in other sectors, Malaysians would have many more high paying jobs to choose from," he noted.
He added Malaysia's median salary was RM 1500 in 2010, and RM 2600 by 2023 which was a cumulative 73 per cent jump.
However, our proximity to Singapore and the weakness of the ringgit reflected only 20 per cent jump when converted to Singapore dollar.
"This creates a false sense of slow salary increment, when in reality, the job market is highly efficient and employers who underpay will struggle to hire people.
"With one out of four Malaysians in the gig economy, and another 1 out of 4 workers having a second job in the gig economy - the minimum wage is an obsolete piece of policy tool in a changed job market post pandemic," he added.
Human Resources Minister Steven Sim said in Dewan Rakyat yesterday that the government will review the minimum wage this year in accordance with the National Wages Consultative Council Act 2011.
In his ministry's winding up speech, the minister said the government will consider views of all stakeholders including employers and employees as well as socioeconomic reports.